Fed: Charities fearful of Henry tax overhaul

Australian charities stand to lose millions of dollars if changes discussed during the Henry tax review are implemented, charity CEOs say.

Treasury Secretary
Ken Henry
's review, due to be released on Sunday, is likely to recommend the clawback of fringe benefits tax (FBT) concessions used by charities to provide top-up payments to their workers.

In its place, it's predicted the review could suggest government agencies pay charities through direct grants.

World Vision chief executive
Tim Costello
said the proposed changes to FBT concessions would leave charities struggling to recruit and retain employees without the ability to offer tax-free benefits.

"If you do a ‘root and branch’ cut of FBT it would have a devastating impact on us," Mr Costello told reporters on Thursday.

"We find it incredibly difficult to attract people with the right skills because we can't pay them enough, and fringe benefits give us just a chance."

Mr Costello, who is also Community Council for Australia chair, said to cover the tax concessions cut, World Vision would have to pay each of its 600 staff members an extra $10,000, costing $6 million a year.

The changes would similarly affect the 52,000 not-for-profit organisations registered as tax concession charities in Australia.